Why You Should Consider Taking a Home Renovation Loan

by Arwind Sharma

Whether you want to buy a house or construct one as per your preference, it's going to be tough on the wallet. But this isn't that different when you're trying to renovate a home. Home renovations don't come cheap, since there's always a lot of work to be done. This is the reason why many people don't think of renovating their homes even when the house needs it.

Fortunately, most banks and NBFCs today offer a home renovation loan. You can use this to refurbish your home, make changes, paint the walls or embellish it the way you want.

What are the Inclusions and Exclusions of the Home Renovation Loan?

A home renovation loan can help you renovate your old house. This can be your childhood home or something that you bought a while back and it needs a fresh coat of paint. To get a personal loan for home improvement, you'll need to have an estimate of the cost. This cost is the amount that you'll need to complete the project. The lender will want to know this, so you'll have to submit this to them. If you're an existing customer of a standard home loan, some banks may not ask for the documents. But there are some institutions who might conduct a physical verification to see how much work needs to be done.

A personal loan for home improvement is extended towards all types of construction and renovation work. This means that you can extend a room, make provision for a balcony, execute flooring work, have a false ceiling, or paint the walls. These are the common purposes for which a home renovation loan is approved. You should know that if you're looking to buy new furniture or add new appliances, the bank may not approve the loan.

What is the Eligibility Criteria for a Personal Loan for Home Improvement?

If you're a homeowner wanting to undertake extension or renovation work, you can apply online for home renovation loan. The loan usually covers up to 80 percent of the total cost. This will be the cost that you'll incur for the project. But if you're an existing customer of the home loan with the same lender, there are a few perks. The bank might approve up to 85% of the total value of the home. That's a lot of money, so think carefully before you accept the loan. You want to ensure that you can pay it back. Home improvement loan eligibility differs from one lender to another. So, you should compare rates and check whether the prospective lender sees you as an eligible customer.

The process of the personal loan for home renovation is quite simple. It becomes even more simple if you already have a home loan with the same institution. In this case, submit an approved plan and the bank will sanction the loan after physical verification. The loan will be disbursed once the estimated value is correlated. The money is generally released according to the rate of completion of construction.

But when you're applying for a home renovation loan, you'd have to submit all the documents required for home renovation loan. You'll also need to submit a fresh application.

Home renovation loan is one of the best ways to ensure that your house keeps looking great even with age. If your house is in dire need of a fresh coat of paint and some rework, you should consider getting a personal loan for home improvement. It can make all the difference, from having a shabby home to a thing of beauty.